Group Insurance Eligibility
And Underwriting Factors

How can you use group health insurance eligibility and underwriting factors to your best advantage?

Is Your Organization Eligible?

An organization of two or more people qualify for group plan consideration. Underwriting requirements tend to break small groups into the categories of 2 - 9, 10 - 50 and 51 up to several hundred or several thousand, depending on the insurance carrier.

A group health plan deals with multiple families, who have diverse health histories and conditions, and with larger risk pools. Underwriting rules and statutory requirements for small group plans depend on risk assessments, on the group size and on the state in which insured members are located. For scattered mambers with multiple locations, the principal business location is used as the contract state.

Some high risk occupations or high turnover groups may be subject to limitations or surcharges, which may also vary by state. Typically, an eligibility and underwriting prescreening process allows you to secure an estimated cost of coverage prior to actual enrollment. Risk assessment factors for groups of ten or fewer people may call for the consideration of a Serious Conditions List as part of the prescreening process.

Usual effective date of coverage options are the 1st or the 15th day of the month. The enrollment process typically takes at least 15 days, but could be up to three weeks, so final application should take that processing period into account.

Employer Eligibility and Underwriting Considerations

To meet group insurance eligibility and underwriting conditions, employers are required to contribute a portion of employee premium costs, typically not less than fifty percent of employee only charges. Usually, there is no insurer requirement for employer contribution to dependents’ premium cost. With direct monthly billing arrangements, the employer is usually responsible for remitting all group premiums for employees and dependents when due.

Waivers of coverage are permitted for employees who evidence other insurance coverage from valid sources such as Medicare or Medicaid, a spouse’s employer group, Tricare or another acceptable health plan. Otherwise, insurers eligibility and underwriting factors may require employee participation of a minimum of fifty to seventy-five percent or more of all employees, depending on the size of the group.

Depending on group size, an employer may create multiple medical plans (possibly up to four) and allow each employee to choose which plan best meets the employee’s needs. The employer contribution can be based on the lowest cost plan, with employees buying up to other plan options.

Are Your Employees Eligible For Group Health Insurance?

For most employee group plans, eligible employees are those who work full time (defined as not less than 30 hours per week), and who are considered an employee for federal income tax purposes at the employer’s establishment within the United States. A company partner, proprietor or officer who meets that definition does qualify.

Retirees, and employees who are part-time, seasonal or temporary, are not eligible as employees. Straight commission employees or “1099” independent contractors may qualify for some insurers, but usually must be pre-approved.

Eligible dependents include lawful spouse and unmarried children who are legally listed as dependents for income tax purposes. Dependents are usually eligible for all medical options selected. Typically, to be eligible for dependent coverage, children must be age 18 or less, or age 23 or less if a full-time student.

Waiting periods for future employees to qualify may typically vary from 30 to 180 days, maybe up to a year, depending on state requirements and employer option.

Takeover And Pre-Existing Conditions

Takeover benefits apply to employees and dependents who had equal or better coverage under a previous health plan that was replaced by the new subject health plan on the effective date of replacement. Coverage of a pre-existing illness or injury under takeover provisions usually require evidence in the form of the last billing from the previous carrier submitted with the original application.

Pre-existing conditions for new employees usually will not be covered for a waiting period of one year if there were no continuous prior coverage that is provable.

Group Insurance Underwriting Considerations

Generally, small business health plan underwriting standards have focused on two behavioral reasons – smoking and obesity – that are the underlying causes for as much as seventy percent of our healthcare problems. Heavy tobacco users and those over the height / weight limits may cause a smaller group to be rated up.

Group insurance issues that can impact the underwriting decisions are the plan benefits selected, cost of any medications, frequency of doctor office visits, potential surgery, the presence of any disease as referenced on a Serious Conditions List, the presence of a Fitness Program, the use of a Medical Self Care and/or a Patient Advocacy Program and applicable state of residence requirements.

Group insurance eligibility factors are what they are. Eligibility factors may be open to limited change, if any, other than variance among different insurers. Underwriting factors can be improved through behavioral and lifestyle changes and fitness assistance services.

To review help available for employees, go to the Fitness Culture.

For information on wellness, fitness and affairs solutions to assist your group members, go to Preventive Health and Fitness, to Healthcare Affairs Management, and to Patient Care Plan.

If you have questions or need additional information, go to our Contact Us Form.

WARNING: NEVER CANCEL YOUR CURRENT INSURANCE UNTIL REPLACEMENT COVERAGE IS APPROVED AND IN PLACE.

To prepare to get a group quote, go to Group Quote Guide.

To get an online group quote now, click on Group Online Quote.